Hearst Corp. announces seventh year of record profits

Steven Swartz is CEO and president of New York-based Hearst Corp., the parent company of the San Antonio Express-News.

Steven Swartz is CEO and president of New York-based Hearst Corp., the parent company of the San Antonio Express-News.

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Steven Swartz is CEO and president of New York-based Hearst Corp., the parent company of the San Antonio Express-News.

Steven Swartz is CEO and president of New York-based Hearst Corp., the parent company of the San Antonio Express-News.

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Hearst Corp. announces seventh year of record profits

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New York-based Hearst Corp., the parent company of the San Antonio Express-News, achieved its seventh-consecutive year of record profits in 2017, Hearst CEO Steven Swartz said in a letter to employees Tuesday.

Revenue in 2017 was flat at $10.8 billion from 2016, but profit reached a new high partly because of gains on sales of investments, Swartz said in the letter. The diversified media company, which is privately owned, didn’t disclose its earnings. The year was still marked with plenty of challenges, especially in its core publishing businesses.

Last year “was another great year to be a consumer of media products but less so to be a provider of that content,” Swartz said. “While platform companies like Google, Facebook, Amazon and Netflix thrived through their dominance of advertising and ecommerce channels, many individual media brands struggled to get their share of the advertising pie and consumers bought fewer television bundles or magazine subscriptions.”

Hurricane Harvey eroded otherwise growing profits at the company’s newspaper division, which also includes the Houston Chronicle, San Francisco Chronicle and Beaumont Enterprise, Swartz said. The newspaper division was on track for its sixth-straight year of profit growth before Harvey hit the Houston and Beaumont markets, he said.

The company spent more than $200 million on capital improvements last year, mainly for new software, equipment and office space and $30 million on various venture capital projects in technology, finance and health care, Swartz said.

Hearst added to its newspaper holdings last year, acquiring newspapers in the New Haven, Connecticut, and Alton, Illinois, areas.

An expected revenue drop in the Hearst Television group of 30 stations occurred in 2017 after a record year in 2016 was driven by the presidential election and the Olympics. He predicted a strong year in 2018 with the Olympics and mid-term elections.

“Hurricanes hitting our newspaper and television markets in Texas and Florida and terrible fires in California reminded readers and viewers of the essential role our journalists play in their communities,” Swartz wrote.

He said the magazine and television groups were in the “crosshairs of disruption” and the magazine division “needs more change.”

“With respect to many of our titles, we need the readers to pay more for the product. And we need to find a way to make digital subscription products work for magazines in the way that they are starting to work for newspapers,” he said.

Swartz said bond rating company Fitch Group, “led the way with an outstanding performance across the world.”

Aviation safety company called CAMP was also profitable along with the Hearst Health portfolio and a business media unit that sells data and software used by consumers in daily activities.